Nvidia, AMD Pay US China Chip Revenue

Nvidia and AMD have agreed to an unusual arrangement with the United States government, pledging 15% of their revenues from advanced chip sales in China in exchange for export licenses. This deal, first reported by the Financial Times, applies to Nvidia's H20 chips and AMD' MI308 chips, which are specialized for artificial intelligence applications. The Trump administration had previously halted sales of these chips to China but reversed the ban last month, with the United States — United States Department of Commerce beginning to issue licenses. While the agreement allows Nvidia and AMD to continue operating in the crucial Chinese market, analysts warn it could negatively impact their gross margins. The United States government has not yet determined how the collected revenue will be used. Critics have questioned the rationale behind the deal, suggesting it might prioritize revenue for the Treasury over national security concerns. This move is seen as part of Donald Trump's broader strategy of intervening in corporate decision-making and redrawing trade relations, as evidenced by his demands on Intel and Apple Inc.'s investment pledges.